Gold Production Stops After Violent South African Strikes, 46 Dead

Conflicts with miners, truck drivers, mine owners, and the police grew into another deadly massacre in South Africa. As the seriousness of the matter escalates, 39 percent of the nation's gold production has been shut down and 46 individuals have lost their lives.

Yesterday, truck-driver strikers were met by security forces with rounds of rubber bullets at a factory in Howick, according to Regional Secretary Mbuso Ngubane From National Union of Metalworkers of South Africa.

The South African Press Association reported that approximately 20,000 transportation industry workers are currently on strike, in addition to about 80,000 other miner strikers. Almost 100,000 workers are now on strike in the nation.

From Bloomberg:

“This truck drivers’ protest has been accompanied by serious provocations, intimidations, public violence and even elements of criminality,” Police Minister Nathi Mthethwa said today in a statement. Workers must refrain from intimidating and assaulting those still working, or destroying property, he said.

…

Wildcat strikes without authorization have spread as workers sidelined traditional representatives for negotiating with management including the National Union of Mineworkers, a backer of the governing political party. Julius Malema, expelled by the ruling African National Congress, has called for workers to disrupt mines and the state to take over the operations.

The call to make mines ungovernable by Malema, who said he would address workers today at Impala Platinum Holdings Ltd.’s Rustenburg operation, could be considered economic sabotage, the NUM’s Secretary General Frans Baleni stated on Sept. 4. SAPA today reported that Malema has canceled his planned speech.

Back in January and February, Impala obliged to the workers demands for higher wages in order to end the conflict from miner strikes that took place at the beginning of the year.

Wealth Daily's Christian DeHaemer reported on the violent gold riots earlier this month, letting readers know that 20% of the world's gold production was at risk due to the riots in South Africa.

South Africa is the world's third-largest gold producer, contributing to 20% of the total. Miner strikes are a long-shot from complete resolution; instead, the movement seems to be gaining momentum as truck-drivers join the other rioters.

In August, 34 miners were killed at Lonmin's Marikana platinum mine... although that particular incident has technically been resolved, the death toll is still rising and the mining-workers' protests are still in full-force in the heart of South Africa's mining industry.

After the Lonmin resolution came about, other mine workers have been demanding salary increases equivalent to those offered in the 'Lonmin settlement,' says David Davis, an SBG Securities Ltd. gold analyst. They believe the Lonmin settlement victory proves that "struggle pays!" and remain inspired to keep the fight alive.

Continued strikes at Anglo American Platinum Ltd. (AMS) – the largest producer – run the risk of major job losses as 21,000 staff-workers have refused to work without following the required resolution procedures.

The company has begun to punish the disobedient workers and it is expected to dismiss many of them to set an example, according to the an e-mailed version of the company's statement.

AngloGold, the world's third-largest gold producer announced that production at all of its South African mines had been paused. “Gold Fields lost a metric ton, or about 32,000 ounces, of output because of strikes at its KDC and Beatrix sites.”

Harmony Gold Mining Co. is the country's third-largest gold producer and it indicated that the company remains unaffected by the labor unrest.

When looking at the gold market as a whole, you should expect that the severity of these strikes will inevitably have a strong impact on gold prices in the months to follow... prepare for prices to rise rather sharply amidst these serious supply disruptions.

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